Germany's Escada sold to Megha Mittal

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FRANKFURT, November 9, 2009 – Several hundred workers at the clothing group Escada hailed new boss Megha Mittal on Friday as she paid a visit to its headquarters in Munich, southern Germany, a labour representative told AFP. ESCADA_AD_830710369.jpg

“We cried for joy,” Ursula Dreyer said. “She is our dream partner, not just that of the management.”

Mittal, 33, dropped by Escada a day after an insolvency administrator signed a contract selling the firm to Mittal Family Trusts, which represents the interests of Indian steel magnate Lakshmi Mittal’s daughter-in-law.

She was accompanied by her husband Aditya Mittal, financial director of the steel giant ArcelorMittal and Lakshmi’s sole son.

Dreyer quoted Megha Mittal as saying that getting involved with a fashion group was the “dream of a lifetime,” and promising to hook Escada up with Indian suppliers she was already in contact with.

Megha Mittal currently works at a London-based investment bank, but Escada’s main operations are to remain in Munich.

Talks with unions on potential job cuts are to begin next week, said Dreyer, who is head of the company’s works council.

After several years of falling sales, Escada filed for insolvency in mid August and began looking for an investor, with more than a dozen suitors expressing interest.

Escada chief executive Bruno Saelzer is to retain his post and the Mittal family has approved a rescue strategy established by the CEO last year that foresees the development of a medium-priced line of clothing.

Saelzer implemented a similar strategy at his former fashion company, Hugo Boss.

No financial details of the sale have been disclosed, though German press reports have estimated the sale price at around 30 million euros (45 million dollars), to which might be added another 100 million in necessary investments over the next two years.

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